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State Capitol Building, Room 217 • Oklahoma City, OK 73105 • (405) 521-3191 • www.treasurer.ok.gov
A publication of the Office of the State Treasurer • Treasurer Ken Miller, Ph.D.
Economic Report TM
Volume 2, Issue 7 • July 30, 2012
Oklahoma
News and analysis of Oklahoma’s economy
Inside
SEE TAXES PAGE 4
• Commentary by U.S. Senator
Tom Coburn
• Taxmageddon
• Oklahoma’s rainy day fund
gets big boost
• Driven by gross production,
June revenue collections fall
• State unemployment rate falls
again
• Economic indicators
Staff
Regina Birchum, Deputy
Treasurer for Policy
Editor
Tim Allen, Deputy Treasurer for
Communications
In Oklahoma each year, hundreds of
millions of dollars in sales taxes are
going uncollected. Nationwide, the
number is set at upwards of $20 billion
by the National Conference of State
Legislatures.
The reason for the lost revenue is that
most online businesses are not currently
required to collect and remit the taxes
due. Instead, the responsibility falls on
the buyers – people using computers or
phones to order online. Most consumers
are either unaware or choose to ignore
state laws requiring taxes be paid on all
purchases made outside the state but
used within the state’s borders, including
online purchases.
The way it has been
A 1992 U.S. Supreme Court ruling held
that businesses selling over the internet
could only be required to collect sales
tax on purchases made by residents
of a state in which the business has a
physical location.
In Oklahoma, businesses such as
Wal-Mart and Target that sell from
in-state locations and via the internet
are required to collect sales tax on all
purchases, while businesses such as
Amazon.com and e-Bay that have no in-state
locations are not required to collect
the taxes. It’s not that the purchases
from the remote retailers are tax free; it’s
just that most of the taxes due from the
purchasers are never remitted.
Federal legislation is under
consideration to change this, permitting
states to collect taxes due from remote
sellers. Two bills, the Main Street
Fairness Act and the Marketplace Equity
Act, would change the responsibility of
collection.
A taxing question
Oklahoma state and local loss due to
non-payment of tax on internet purchases
Source: State and Local Government Sales Tax Revenue Losses from Electronic Commerce, University of Tennessee
$75
$90
$105
$120
$135
$150
2007 2008 2009 2010 2011 2012
$140.8
$125.3
$106.5
$85.9
$95.5
$89.5
(in millions)

State Capitol Building, Room 217 • Oklahoma City, OK 73105 • (405) 521-3191 • www.treasurer.ok.gov
A publication of the Office of the State Treasurer • Treasurer Ken Miller, Ph.D.
Economic Report TM
Volume 2, Issue 7 • July 30, 2012
Oklahoma
News and analysis of Oklahoma’s economy
Inside
SEE TAXES PAGE 4
• Commentary by U.S. Senator
Tom Coburn
• Taxmageddon
• Oklahoma’s rainy day fund
gets big boost
• Driven by gross production,
June revenue collections fall
• State unemployment rate falls
again
• Economic indicators
Staff
Regina Birchum, Deputy
Treasurer for Policy
Editor
Tim Allen, Deputy Treasurer for
Communications
In Oklahoma each year, hundreds of
millions of dollars in sales taxes are
going uncollected. Nationwide, the
number is set at upwards of $20 billion
by the National Conference of State
Legislatures.
The reason for the lost revenue is that
most online businesses are not currently
required to collect and remit the taxes
due. Instead, the responsibility falls on
the buyers – people using computers or
phones to order online. Most consumers
are either unaware or choose to ignore
state laws requiring taxes be paid on all
purchases made outside the state but
used within the state’s borders, including
online purchases.
The way it has been
A 1992 U.S. Supreme Court ruling held
that businesses selling over the internet
could only be required to collect sales
tax on purchases made by residents
of a state in which the business has a
physical location.
In Oklahoma, businesses such as
Wal-Mart and Target that sell from
in-state locations and via the internet
are required to collect sales tax on all
purchases, while businesses such as
Amazon.com and e-Bay that have no in-state
locations are not required to collect
the taxes. It’s not that the purchases
from the remote retailers are tax free; it’s
just that most of the taxes due from the
purchasers are never remitted.
Federal legislation is under
consideration to change this, permitting
states to collect taxes due from remote
sellers. Two bills, the Main Street
Fairness Act and the Marketplace Equity
Act, would change the responsibility of
collection.
A taxing question
Oklahoma state and local loss due to
non-payment of tax on internet purchases
Source: State and Local Government Sales Tax Revenue Losses from Electronic Commerce, University of Tennessee
$75
$90
$105
$120
$135
$150
2007 2008 2009 2010 2011 2012
$140.8
$125.3
$106.5
$85.9
$95.5
$89.5
(in millions)